MSD passes resolution setting interim minority contracting goals

This article first appeared in the St. Louis Beacon, March 9, 2012 - The Metropolitan Sewer District’s Board of Trustees approved interim changes to the agency’s contracting goals for minorities and women.

The six-person board on Thursday unanimously approved a resolution making interim changes to hiring policies while a disparity study is conducted. Permanent changes are expected to be adopted when the study ends in October, said MSD spokesman Lance LeComb.

The agency has faced increased pressure to hire more women and minorities on projects, especially after MSD announced last year it would undertake a $4.7 billion plan to settle a federal lawsuit. The board declined to pass a resolution in December changing the policies, which prompted the St. Louis branch of the NAACP to threaten a boycott of St. Louis and St. Louis County.

Currently, MSD's goals for minority and women-owned contracting vary, depending on the work. For instance, a contract for at least $50,000 has a "blended" 25 percent goal for "minority business enterprises" and "women business enterprises," with a minimum for each type of business.

The resolution passed Thursday included the following goals:

Construction contracts worth at least $50,000 would require that 25 percent would go to MBEs and 5 percent would go to WBEs.

Non-building construction contracts, including sewer work, of at least $50,000 would include a “blended” goal of 15 percent for MBEs and WBEs. At least 7.5 percent of that total would be allocated to MBEs.

Professional service contracts of at least $50,000 would have a blended goal of 30 percent for MBEs and MWEs.

For construction projects, MBEs and MWEs that are “prime” contractors could take credit “for 5 percent of their designation’s subcontracting goal.” That means, said LeComb, that companies in charge of projects would have to seek out more minority and women-owned subcontractors to work on projects. “It compels them to go out and bring in smaller companies to bring to their bid,” he said.

Workforces for construction projects of more than $500,000 would have to consist of at least 25 percent minority and 6.9 percent women. That same percentage would apply to professional services projects of at least $500,000.

During a meeting Tuesday outlining the changes, MSD's executive director Jeff Theerman presented the interim goals as a first step to provide more economic opportunities to minority and women-owned businesses.

“Because we have a 23-year program with $4.3 billion of expenditures, we have an opportunity to do something nobody has been able to do,” Theerman said Tuesday. “Past efforts have revolved around finite projects with short-term length. … Our program is different and it affords us the possibility of doing different things.”

Mixed reaction

The resolution garnered a somewhat mixed reception Thursday from those following the process. MOKAN – an advocacy organization for minority contractors – criticized the resolution before the vote.

Yaphett El-Amin, a former state lawmaker who serves as MOKAN’s executive director, told trustees that the non-construction goals were inadequate.

“I don’t know about anybody else in this room, but I am very much concerned about minority businesses surviving,” El-Amin said. “We understand that without work, their capacity is lowered. And ultimately, that runs thin and drives them out of business.”

While he said he wasn’t completely satisfied, St. Louis NAACP President Adolphus Pruitt II said that a disparity study will likely result in different goals that will meet his organization's approval. He also said his group was holding off on a boycott until after the disparity study.

“The disparity study’s going to change everything," said Pruitt. "No matter what we agreed to today, 150 days from now it’s all going to change. Because the disparity study is going to come back and set some goals."

Start of update: In public comment before the trustees, Gary Elliott of the Eastern Missouri Laborers District Council said he supported a resolution with workforce goals of 14.7 percent minority and 6.9 percent women for construction projects and professional services contracts.

But Terry Briggs, a spokesman for the Laborers-Employers Cooperation and Education Trust Fund, said on Friday that Elliott no longer supports the resolution after the Board of Trustees increased the workforce goals to 25 percent minority and 6.9 percent women. End update.

Theerman also said Tuesday that the agency would take other steps – including contractor assistance programs to foster startup companies and college co-op programs for engineering and construction technology students. And LeComb added that the dialogue and outreach with stakeholders will continue.

“This is not going to be just MSD, though,” LeComb said. “There is only so much we can do. And certainly with $4.7 billion there’s a lot we can do to lead the way. But it’s going to be a much broader community effort. Everybody’s going to have to come to the table, speak their minds and understand it’s going to be a journey.

An earlier version of the story misstated Gary Elliott's position on the resolution.